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Volume 2, Issue 44:  Monday, April 17, 2000

  • "Clinton's Message: Internet Important for Everyone"
    Reuters (04/17/00); Holland, Steve

    President Clinton is expected on Monday to announce initiatives to bring Internet access to poorer U.S. schools and communities, as part of his digital divide agenda that encourages participation from the private sector. Indeed, Gateway has promised to train 75,000 teachers to use educational technology and the Kaiser Family Foundation is set to announce a series of star-studded public-service announcements urging youth to become technologically literate. Clinton's expected announcement, to be televised by the major networks, comes at the end of a two-day tour aimed at promoting efforts to close the digital divide. Tuesday Clinton will be in Chicago to speak at the COMDEX computer show.

  • "Web Firms May Vastly Inflate Claims of 'Hits'"
    Los Angeles Times (04/17/00) P. A1; Menn, Joseph

    With no guidelines in place to govern the measurement of Internet traffic, many Web sites are significantly exaggerating the number of hits they receive in order to maximize ad revenue. In fact, site operators often boost the traffic figures they give to advertisers, investors, and the public by 50 percent to 100 percent, experts say. Content sites are particularly prone to exaggerating traffic numbers, since success for many depends on Forrester Research's projected rise in online ads from $2.8 billion last year to $22 billion by 2004. While Web traffic survey firms Nielsen NetRatings and Media Metrix publish traffic data for the 50 most popular sites, less visited sites simply report figures recorded by their own in-house systems. Traffic figures are rather subjective since some numbers include traffic generated in-house or by search engine robots, while other figures do not. Auditors counting hits frequently argue with site operators over whether search engine hits should be included in statistics, as well as whether one user accessing a page with 10 graphical elements should count as 10 hits or only one. In addition to the problems involved in counting hits, determining ad viewership and click-through rates is also difficult. Web market research firms usually do not measure how many surfers actually click on a banner ad, and site operators often inflate ad figures. Complicating the matter, hackers can set up their own sites with ads, and then send false clicks through the ads repeatedly. Advertisers are beginning to demand more accountability for online advertising, and some are switching to a pay-per-lead model or even a pay-per-sale model.

  • "Microsoft Declares Security Flaw Isn't as Bad as Believed" Wall Street Journal (04/17/00) P. B8; Bridis, Ted

    Microsoft says the security flaw found last week in its FrontPage 98 software poses less of a threat than originally thought. Following reports of the glitch, the software giant on Thursday acknowledged that illicit code in FrontPage 98 could allow hackers to gain access to hundreds of thousands of Web sites, possibly exposing sensitive data. Initial reports said the code included a secret password, "Netscape engineers are weenies," which allowed outsiders to access multiple Web sites on a single server. However, Microsoft now says the flaw requires that a user have the system administrator's permission to view files. While investigating the password flaw, security experts found a second flaw in FrontPage 98 that could enable hackers to run unauthorized programs on a server or to make the server crash. Microsoft admits that this second flaw "significantly increases the threat to users of these products." Both the "weenies" flaw and the server vulnerability reside in the "dvwssr.dll" file, which Microsoft recommends that users delete immediately.

  • "Anti-Spam Group Pushing Hard for Legislation"
    Newsbytes (04/14/00); McGuire, David

    ChooseYourMail.com gave Congress a tape containing 2.76 million spam messages last week as part of an effort to help grease the wheels of anti-spam legislation sponsored by Rep. Gary Miller (R-Calif.). Miller's bill, which has been approved by the House Commerce Committee's Subcommittee on Telecommunications, Trade and Consumer Protection, gives ISPs the right to ban spam from their services and sue violators. ChooseYourMail.com President Ian Oxman warns that spam is a threat to e-commerce. The company recently released a new survey finding that most Internet users believe that the e-commerce sites they visit are responsible for producing spam. More than seven of 10 consumers say it is "somewhat likely" that e-commerce sites are giving their email addresses to spammers, the poll finds.

  • "Phone Rates Will Rise to Expand Service for Indians"
    Washington Post (04/17/00) P. A2; Babington, Charles

    Long-distance phone rates will be increased this year to fund President Clinton's initiative to assist 300,000 Native Americans with phone service maintenance that will allow them to get Internet access, administration officials announced Sunday. The plan calls for a 0.4 percent rate increase to provide $17 million to a phone service subsidy for American Indians. Roughly 50 percent of American Indians do not have telephones, while 94 percent of U.S. homes are equipped with phone lines. Roughly 300,000 Indian residences will be provided with $1 per-month basic phone service. Clinton will officially announce the initiative Monday at a Navajo reservation in New Mexico. FCC Chairman William Kennard said the initiative is an aggressive step toward eliminating the digital divide between consumers lacking Internet access and those who have it.

  • "Companies Give Online Business Some Credit"
    Investor's Business Daily (04/13/00) P. A8; Graham, Jed

    As business increasingly moves to the Internet, buyers need faster ways to obtain financing for major purchases. A number of Internet financing companies, such as CapitalStream.com, ECredit.com, and InPurchase are now emerging to fill this need. Capital Stream CEO Stephen Campbell says his company works with a range of lenders to close financing within minutes. The company's online service, CapitalStream.com, accepts business credit applications at the point of sale and screens credit automatically using the financing partner's criteria. "Customers are not completing their online shopping," says International Data analyst Jennifer Blackmore, adding that real-time financing improves a vendor's chances of closing a deal. Internet financing companies are targeting small-business online buyers, since small and midsize companies often need credit to finance purchases. U.S. companies use credit to buy about $300 billion worth of equipment each year, according to Capital Stream.

  • "Software Creates Pirating Bonanza"
    Infobeat.com (04/12/00); Harris, Ron

    Gnutella is the latest program available on the Internet that has Internet experts in a conundrum. While Gnutella was created for the sharing of information in the easy-to-use and open environment of the Internet, the program has turned into a boon for those who want to get music, movies, and software at no cost. Gnutella essentially allows users to look into the hard drives of other users and download whatever is there, whether the information is copyrighted or not. In a sense, Gnutella is similar to Napster, the popular online software that allows users to search each others' computers for music stored in the MP3 format. Napster has angered the Recording Industry Association of America, which has filed a suit to shut down the program. However, Gnutella appears to be even more threatening to makers of music, movies, and software. Napster makes use of a central server computer for searches, which means that there are Internet addresses that record companies or others can block to stop the copying of music. With Gnutella, however, the program links directly with individuals, leaving no traces of Internet addresses. Rogue programmers at AOL subsidiary Nullsoft designed Gnutella, which was briefly posted on the site on March 14 before being pulled off. Within the few hours that Gnutella was accessible, numerous copies of the program appeared on other Web sites. And now different versions are appearing daily. Because the law is unlikely to catch such sophisticated technology, experts say technology will likely be the enforcer of such an illegal bazaar. "The battleground is really between technology and the law," says Zona Research analyst Greg Blatnik, who says it will be difficult to protect creative content that has already been made available.

  • "Now, Brits Can Surf To Their Hearts' Content"
    Business Week (04/17/00) P. 186; Capell, Kerry; Echikson, William; Matlack, Carol

    Fixed-rate pricing for Internet service is now available in the United Kingdom and will soon spread to the rest of Europe. Until recently, Web surfers in Europe were charged high telephone rates for every minute they spent online, hindering the growth of Europe's Internet and limiting the creation of a U.S.-style New Economy. However, now two American companies, AltaVista and cable and communications group NTL, have introduced flat-rate, unlimited Internet access in Britain. This bold move has led a number of other companies, including British Telecom, to follow their example. The changeover to fixed-rate pricing is expected to cut the cost of Web surfing and to lead to a dramatic rise in usage. Andy Mitchell, managing director of AltaVista in Britain and Ireland, says one in two Britons will be using the Internet within 18 months, compared with only one in five now. Britain's price war has also spread to the Continent, with Deutsche Telekom, owner of Europe's largest ISP, T-Online, stating that it will introduce unlimited Internet access to T-Online customers for a flat fee of approximately $50 beginning May 1. Nevertheless, a question mark hangs over the future of a number of ISPs in Europe, including France's LibertySurf and Netherland's World Online, which make their money by dividing with the phone company the revenues derived from Internet calls. The move to cheap, unlimited access makes their business models appear outdated, and as phone charges fall they will be forced to discover new sources of revenue.

  • "Tech Investors Get Northern Exposure"
    Tornado-Insider.com (04/07/00); Middleton, Guy

    Iceland is one of the world's top technology countries, and it's geographical disconnection from the rest of the world makes it well suited as an adopter of high technology, said Finance Minister Geir Haarde, speaking at a recent venture conference in Reykjavik. Indeed, Haarde's words ring true, as it has been estimated that anywhere from 74 percent to 83 percent of households in Iceland have Internet access, which would easily make Iceland the top country in the world in terms of Internet penetration. The venture conference attracted Iceland's software companies, and many seemed smitten by the idea of going global. Netwerk CEO Holberg Masson says Iceland's startups often must look to foreign soils for strategic funding when they seek to go public. "It's a handicap coming to the market, we don't have the experience here," he says. The technology sector is just starting to come into its own on Iceland's 15-year-old stock exchange, which is heavy on large banking and fishing companies. The Icelandic Software Fund began listing on the exchange in 1997 and has since posted an 800 percent growth rate. Meanwhile, Iceland's Form.is is looking to secure 20 million euros in funding for a pan-European launch of systems that will enable EU governments to place government forms on the Internet. Form.is will trial the systems in Iceland and Denmark.

  • "Study Reveals U.S. 'Internet Hotbeds'"
    E-Commerce Times (04/12/00); Hillebrand, Mary

    A new Nielsen//NetRatings geographic Internet usage report shows that the pattern of Internet usage in the top 20 U.S. markets does not coincide with population size--for instance, San Francisco is only the third biggest city in terms of numbers of Internet users, with 2.2 million, but it has the highest penetration rate with 61 percent of the population online. The report looks at the total size of a given market, the percentage of its residents using the Internet, how long they stay online, and how their Web use affects their TV viewing time and other data. San Francisco, Denver, and San Diego spend more time online than much larger markets; the average San Diego user spent 11 hours and 16 minutes online during February. Nielsen//NetRatings says the data indicates a close connection between time online and Internet penetration, and suggests that the cities with heavier usage are Internet hotbeds--the leading edge of new media. San Francisco, San Diego, Washington D.C., Seattle, Portland, and Boston are the six cities with over 50 percent penetration, and Nielsen//NetRatings attributes the penetration rates to the markets' focus on technology. NetRatings vice president of analytical services Allan Weiner says the areas with high penetration indicate the areas that are likely to move first to TV-Internet convergence. This information could help technology and media companies determine which regions present the largest opportunities for new multimedia content services, Weiner says.

  • "Welcome to VoIP, Version 2"
    InternetWeek (04/10/00) No. 808, P. 1; Moozakis, Chuck

    Businesses are using second-generation VoIP to lower administrative and staff costs while establishing voice and data applications intended to increase productivity among workers. Software AG is unveiling plans to deploy a VoIP network connecting over 60 offices and 2,500 employees across the globe. Global systems integrator Getronics also had recent success with the technology. Businesses are beginning to use VoIP seriously, according to Pete Dailey, an analyst with Frost & Sullivan. VoIP gateways will generate $3.6 billion in revenue by 2006, compared to $209 million last year, Frost & Sullivan predicts. VoIP is becoming more attractive to IT managers because of its ability to handle voice and data integration. Scalability is an important function for VoIP, as is flexibility and reliability. Smaller businesses are beginning to invest in VoIP. Catalyst Capital LLC, a venture capital-management firm, began operating its VoIP system in the fall, offering converged voice and data access to 50 employees.

  • "The Web Brings Real-Estate Transactions Home"
    InformationWeek (04/10/00) No. 106, P. 106; Higgins, Kelly Jackson

    The real estate industry has been relatively slow in adapting to technological innovation, especially the growing popularity of the Internet. Despite the slow initial pace, about 20 percent of today's real estate agents have their own Web sites; and hundreds of thousands of other sites have also emerged with information on home buying and selling, borrowing a mortgage, and other housing-related issues. Although the trend has helped agents, the main beneficiary of recent progress has been the consumer--who now has access to the Multiple Listing System (MLS) database, once considered privileged information for Realtors. The MLS database--found on the National Association of Realtors' Realtor.com as well as on the Web sites of major realty firms such as Century 21 and REMAX--has 1.3 million property listings in the United States and Canada. Access to it allows consumers to scale down their search for a home. Despite these technological advancements, consumers must still hire an agent and do a great deal of research on their own. To help close this gap between searching for information and actually buying a property, companies such as Synteleos are creating applications that can bring together all parties involved in a transaction. Several real estate and contracting companies already use the Synteleos service, and some who are not are reformatting their software so that it can be integrated. As this trend continues, real estate agents are adapting to the new market by specializing their services and marketing themselves as being able to help consumers deal with the new technology available to them.

  • "Analysts Predict Internet Voting to Be Standard by 2004"
    InfoWorld.com (04/11/00); Shewmake, Brad

    Internet voting will be offered by every U.S. state by 2004, the Gartner Group predicted on Tuesday at its Spring Symposium/ITxpo. By eliminating the need for manual ballot counting and physical polling booths, the Internet will make voting more efficient and less expensive than the traditional method, says Gartner Group's Christopher Baum. Online voting will provide convenience for workers who will no longer have to travel to polling locations. Moreover, the technology will benefit low-income and upper-income Americans alike, as the country works to provide Internet access for everyone, says Gartner. However, the government needs to address system outages, fraud, and hacker attacks to make nationwide online voting a reality by 2004. To make the online voting system secure, the government will need adequate resources to prevent outages and an advanced user-recognition program to verify voters' identities and ensure that they vote only once. Arizona's recent Democratic Primary, which allowed online voting and obtained a record voter turnout, is likely to encourage other states to also take voting online.

  • "Home Is Where the Hack Is"
    Interactive Week (04/10/00) Vol. 7, No. 14, P. 28; Spangler, Todd

    Nathan Hoffman, a lawyer in private practice, says the threat of DoubleClick collecting personal information is negligible compared with the risks of home computers with broadband Internet connections. Hoffman has filed a class-action lawsuit against Pacific Bell that alleges the company has participated in false advertising, negligence, and breach of warranty. He is holding Pacific Bell responsible for the vulnerability of his computer because the company claims it will deliver a secure connection to the Internet. Hoffman, who accesses the Internet using PacBell's DSL connection, is among a growing number of broadband subscribers who are now demanding that broadband providers address the security issues of always-on Internet connections. Although the threat of stolen cookies, rifled hard drives, and commandeered operations has always existed with dial-up connections, always-on connections has made it easier for hackers to get into computers. Greg Gilliom, president and CEO of intrusion-detection software company Network Ice, says hackers use home systems as a shield for breaking into other systems. About 28 percent of home computers with broadband connections allow any Internet user to access their files, according to security site Sheilds Up!. As broadband access grows, the number of vulnerable systems will also rise. ISPs have remained silent on connection security, for the most part. The vast majority of Web surfers will not be exposed, so ISPs do not want to alarm the people just "hooking up a Windows 95 computer," suggests Rex Cardinale, chief technology officer at DSL wholesaler Covad Communications. Industry experts say consumers can secure their computers by disabling their file-sharing function. Analysts expect ISPs may be willing to have firewall software embedded in their equipment. EarthLink is being proactive by offering a firewall with its DSL service later in the year.

  • "Foreign Affiliates Hack Away at Server Prices"
    Nikkei Weekly (04/10/00) Vol. 38, No. 1922, P. 1; Ikeya, Akira

    Server prices in Japan have been falling since early last year as a result of the steady price cuts offered by Japanese affiliates of American computer makers. Pressure from these affiliates, notably Dell Computer KK and Compaq Computer KK, has caused Japanese server makers such as NEC to lower prices as well. Some low-end servers such as Dell's PowerEdge 1300 now cost less in Japan than in the U.S. The cheapest PowerEdge 1300 now costs 148,000 yen, compared with 250,000 yen two years ago for Dell's lowest-priced server. The price cuts are fueled by the lower cost of components such as microprocessors as well as a sharp increase in demand due to the Internet and e-commerce. Much of the recent market expansion is attributed to PC servers, as many schools purchase the low-end servers to bring the Internet to the classroom. Dell and Compaq have been able to slash prices by selling directly over the Internet and buying parts in bulk. NEC, which leads the PC server market in Japan, has retaliated by cutting its own prices, and now sells a PC server package including peripherals and software for 198,000 yen. However, Dell and Compaq say the price wars are not likely to continue since further cuts would make it difficult to turn a profit.

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